The Money Fix: Beth’s Internal Budget Battle

Welcome to Season 1 of The Money Fix! With the help of top national money experts, nine DW readers will tackle real-life money problems, and blog about their progress—right here, in real time.

Well, since my first post last month, my husband and I have been wrestling with decisions of faith and money, regarding our upcoming adoption.

After much discussion and "running numbers", we had some hard decisions to make about Liz Pulliam Weston’s suggestions for how we might save the $10,000 to $12,000 we’re likely to need.

After much discussion and "running numbers", we made some decisions about Liz's suggestions.

We are not refinancing the mortgage from our current 15-year to a 30-year, although Liz is right that it would lower our monthly obligation. We just can't do it. We have less than 14 years left to pay and I would rather cut elsewhere.

Liz felt that we might be able to save enough without taking on more debt. At present we owe approx. $18,500 on our home equity line ($25000 available). We drew down what was remaining on the line (around $6000) and our rate will lock in this week at 5.7%. I went ahead and drew down the funds because I am not sure if we can save enough to pay cash for the travel expenses before the time comes. I put this money in an account earning 2.9% and will be adding funds to it monthly in order to pay for travel expenses.

Our goal is to have this adoption paid off in five years or sooner. We will be paying $300 monthly toward the HELOC and putting $700 monthly in the savings account for travel expenses. If we do this and put our entire tax credit toward the HELOC (about $10,000), we should have the home equity line paid off in five years.

Regarding our vehicles: we are going to do as Liz says and "drive them into the ground" (which we had already planned to do). We have also looked at options regarding selling my vehicle (which has significant equity) and purchasing something less expensive which would still meet the needs of a growing family.

Even if we remain in our current vehicles and do no debt snowballing, we will be done with one car loan in less than three years and the other in four years, which means that within the five years noted above, we can be totally DEBT FREE!

Ok, this is the big place where faith and money intersect: We are not reallocating our tithe. This decision was made after much discussion between my husband and I, and after seeking pastoral counsel. This adoption is a step of faith for us in many areas, and this is one of them.

We aren't very perfect advice-followers, but one of the biggest blessings of The Money Fix process has been learning where our spending reflects our values—and where it doesn’t: i.e. eating out, buying things we don’t need.

Coming up with a plan has also helped me feel less overwhelmed. Liz was complimentary of other parts of our finances (no credit cards, in good shape with regard retirement and college savings for our son), so it felt good to know that we were doing some things right. My goal for this month is to try to do more things right—save more, spend less, get ready for another little one, etc. Let's see how it goes…